Caribbean Islands

Economy

Like most of the West Indies, the British dependencies
traditionally depended on agriculture, some fishing, and a few
light industries such as straw and basket work. Tortola, in the
British Virgin Islands, was also the site of rum distilleries.
Unemployment was high, because much of the work was seasonal. As a
result, all three territories have worked hard to build up
year-round tourism and attract light industries.

The gross domestic product (GDP--see Glossary) of the British
Virgin Islands in 1985 was US$84.5 million, of which tourism
accounted for approximately 50 percent and other services and
government for approximately 50 percent. Per capita GDP in the
British Virgin Islands in 1985 was estimated at US$7,260, a higher
figure than that of many neighboring Caribbean states. Most of the
work force was employed in the United States Virgin Islands.
Tourism (26 percent), government service (20 percent), and
construction (18 percent) were the principal employers of the
domestic work force in the mid-1980s.

In the late 1980s, tourism was the principal economic activity
in the British Virgin Islands, generating about 50 percent of the
national income. The number of tourists visiting the islands
increased from 70,287 in 1976 to 161,625 in 1984. The major
characteristic of the islands' tourist industry was that it was
based largely on yachting. Sixty-three percent of the arrivals
chartered or lived on yachts. Seventy percent of the visitors came
from the continental United States, 11 percent from Canada, 10
percent from Puerto Rico and the United States Virgin Islands, 7
percent from Western Europe, and 2 percent from elsewhere in the
Caribbean.

Offshore financial services were also a rapidly growing part of
the economy in the late 1980s. A direct result of the enactment in
July 1984 of the International Business Companies Act was the
incorporation of about 3,000 companies in the British Virgin
Islands between July 1984 and December 1986.

Agriculture remained moderately important in the British Virgin
Islands but was limited by the islands' poor soil. Farms, generally
located on the larger islands, tended to be small, averaging just
over seven hectares. In general, the soils of the islands were
poor, and food crops were rotated with pasture. Raising cattle for
export was the main agricultural industry, but some sheep and goats
also were raised. Crops included sugarcane, used locally for the
production of rum, and fruits and vegetables, often sold to
customers in the United States Virgin Islands.

Overall, 60 percent of the total land area was in private
ownership. The remainder was owned by the crown. Of the privately
owned land, 75 percent belonged to native British Virgin Islanders,
18 percent to foreigners, chiefly United States citizens, and 7
percent to nonindigenous British subjects. The government used 3
percent of crown lands for its own purposes and rented 31 percent
of its land to native islanders and some 7 percent to British
subjects and foreigners. Fifty-nine percent of the crown lands were
not in use. Nationals of other countries, including Britain, had to
obtain a license to buy land.

The coastal waters of the British Virgin Islands abound in
various species of fish, which provided one of the largest sources
of protein in the islands and the largest export. In 1983 fish
exports contributed US$216,000 to the economy. By the late 1980s,
traditional sloops had given way to motorized fishing boats. Deep-
sea sport fishing also had been developed and was part of the
growing tourist industry in the islands.

Exports from the British Virgin Islands were negligible in
comparison with imports. In 1985 exports stood at US$2.5 million
and imports at US$91.4 million. Fresh fish, rum, gravel and sand,
fruits, vegetables, and livestock were the primary exports. The
United States Virgin Islands received about 50 percent of the
exports. Other Caribbean islands accounted for most of the rest.
There was negligible export trade with the United States or
Britain. The islands imported building materials, automobiles,
machinery, fuel, foodstuffs, manufactured goods, and chemicals,
primarily from the United States (about 50 percent), the United
States Virgin Islands (13 percent), and the rest of the Caribbean
(27 percent). The trade deficit was made up in three ways--by
remittances from British Virgin Islanders working overseas, tourist
receipts, and foreign investment.

Although Anguilla was less prosperous than the British Virgin
Islands, it sustained steady economic growth for the five years
ending in 1986. In 1983 GDP was US$6 million and per capita GDP a
respectable US$6,000. Services and tourism contributed heavily to
GDP; this was reflected in the distribution of the labor force,
46.3 percent of which was in the service sector. Industry accounted
for 35.2 percent of all employment, and agriculture accounted for
8.5 percent. Unemployment on Anguilla was 30 percent in 1985.

Anguilla's economic growth in the 1980s was a direct result of
its improved standing as a tourist attraction. The total number of
visitors rose by 16 percent from 1985 to 1986 and provided revenue
for the private sector through tourist-related services and for the
public sector through increased duties. In 1986 the Caribbean
Development Bank (CDB) outlined new projects that would help
Anguilla sustain the growth of tourism. These projects included
construction of a modern, forty-four-room hospital and a new
airport terminal.

Salt, a traditional export, remained Anguilla's second most
important source of foreign revenue in the mid-1980s. Most of the
salt was used in oil refinery operations in Trinidad. Salt
production had been temporarily suspended in the late 1970s after
most of the yield was destroyed by rains.

Workers' remittances from abroad also formed a large part of
the island's income; 20,000 people of Anguillian ancestry lived
abroad, concentrated in Slough, England, and South Amboy, New
Jersey. Because there was no income tax in Anguilla, customs
duties, license fees, and revenue from postage stamp sales were
important sources of government income.

Domestic agriculture was a high priority on Anguilla, although
the island had little arable land. Only 13 percent of Anguilla's
total area was cultivable, and only a third of that was truly
arable. Crops were grown primarily for domestic use. The British
government has invested in irrigation and water projects, including
desalination plants. Legumes, sweet potatoes, and sorghum were the
main crops, mostly grown in "backyard garden-scale" plots averaging
little more than one-quarter of a hectare. When rainfall was good
and crop surpluses resulted, the territory exported small amounts
of vegetables and fruits to neighboring islands.

Anguillians raised cattle, goats, sheep, and pigs for domestic
use and for export. The island also exported lobsters, although
overfishing had depleted the once valuable lobster beds. In 1983
Anguilla exported fish and shellfish valued at US$49,000.

Exports from Anguilla in 1981 had a total value of US$5.4
million. Most of Anguilla's exports were to other Caribbean
islands; little was destined for either the United States or
Britain. Import statistics were not available, but the United
States accounted for a large proportion of Anguilla's imports.

The per capita GDP of Montserrat was far lower than that of the
other two island groups, standing at only US$3,130 in 1985. GDP was
US$37.1 million in 1985, of which 79 percent was generated by
services, 15 percent by manufacturing and industry, and 6 percent
by agriculture. Tourism alone generated about 25 percent of
Montserrat's GDP. Because of tourism's significance, large amounts
of the available foreign aid, mostly from Britain, were used on
such projects as the improvement of airport and dock facilities.

Like the labor forces of Anguilla and the British Virgin
Islands, the
Montserratian work force was concentrated primarily in services.
Sixty-four percent of the labor force was employed in the service
sector, 25.7 percent in industry, and 10 percent in agriculture in
1983. Thirty-five percent of the island's women were active in the
labor force in 1982. Unemployment was estimated at 5.3 percent in
1985.

Thirty-five percent of the island's annual income came from
remittances by overseas citizens; between 1959 and 1962, one-third
of the population left for Britain. Expatriates living on the
island contributed 25 percent of GDP. The government has attracted
foreign light manufacturing (mainly of plastic bags, textiles, and
electronic appliances), which accounted for 90 percent of the total
value of exports in 1984. The sea island cotton industry was also
important. In addition, more than twenty offshore banks (see Glossary) had been established. These were subject to strict
government controls.

Barely 18 percent of Montserrat's total area is suitable for
crops and pasture. Soils are poor, and scant rainfall and periodic
droughts frequently limit yields. As on Anguilla, the British
government invested in irrigation and water projects. Montserrat's
farmers grew limes, bananas, vegetables, and some cotton. When
rainfall was good and crop surpluses resulted, Montserrat also
exported small amounts of vegetables and fruits to neighboring
islands. In general, however, agriculture was declining on
Montserrat; the island's Ministry of Agriculture estimated that
only twenty farmers were consistent producers. Montserrat also
raised livestock for domestic use and export. Seafood, mostly fish,
also was exported.

Like Anguilla and the British Virgin Islands, Montserrat
imported far more than it exported. In 1985 exports were valued at
only US$2.8 million, while imports amounted to US$18.3 million.
Most of Montserrat's imports came from the United States (33
percent) and the European Economic Community (32 percent). Exports
went mainly to other Caribbean islands (59 percent) and to Western
Europe (18 percent).

In the mid-1980s, communication and transportation networks in
the British Virgin Islands were among the least developed in the
Commonwealth Caribbean. The islands had about 3,000 telephones;
interisland service was poor, although a submarine cable provided
somewhat more reliable international connections. One AM radio
station on 780 kilohertz and a television transmitter using Channel
5 provided limited service on Tortola. The Island Sun,
published weekly, was the British Virgin Islands' only local
newspaper. There were just over 100 kilometers of surfaced roads,
but they were generally narrow and in poor condition. Virgin Gorda
and Road Town on Tortola had the only two paved airfields.
Regularly scheduled flights linked Road Town with San Juan, Puerto
Rico, and St. Thomas in the United States Virgin Islands. The port
at Road Town could handle large ships. The islands had no railroads
or inland waterways.

The communication and transportation systems on Anguilla were
small but modern and met the needs of the island's population. The
island had 890 fully automatic telephones with international
service available. The government-owned Radio Anguilla broadcast on
1505 kilohertz; Caribbean Beacon, a religious organization, had
strong transmitters on 690 and 1610 kilohertz and a small FM
station on 100.1 megahertz. There were no television transmitters
or local newspapers. About sixty kilometers of all-weather roads
reached all areas of the island. Regularly scheduled flights from
neighboring islands landed at Wallblake Airport on the south coast.
Road Bay, on the north-central side of the island, was the
principal port. The island had no rail or inland water facilities.

Communications on Montserrat were excellent. A subsidiary of
Cable and Wireless, a British telecommunications firm, had just
over 3,000 telephones with good islandwide and international
service. The number of broadcast facilities, considering the size
of the island, was quite high. Radio Montserrat, owned by the
government, broadcast on 880 kilohertz. The commercial Radio
Antilles had two FM transmitters on 99.9 and 104.0 megahertz, a
station on 740 kilohertz that relayed Radio Canada programs in the
evening, and a powerful transmitter on 930 kilohertz with
programming in English and French that could be heard throughout
the Eastern Caribbean. Deutsche Welle, the official shortwave
service of West Germany, operated a relay on Montserrat for
programming to the Western Hemisphere. The television station on
Channel 7 could be received throughout the island as well as on
Antigua and St. Kitts. No local newspapers were published.

Development of Montserrat's transportation infrastructure was
hindered by the mountainous terrain. A 200-kilometer paved road ran
along the west, north, and east coasts; 80 kilometers of gravel
roads linked smaller villages. Plymouth was the island's principal
port. The only airfield was about ten kilometers from Plymouth; it
had regularly scheduled flights to neighboring islands. There were
no railroads or navigable inland waterways.

The British Virgin Islands and Anguilla supplied electricity at
the United States standard of 120 volts, whereas Montserrat used
the European standard of 220 volts. Currencies in the territories
varied. Although the British Virgin Islands was part of the British
pound sterling system, the only currency in actual use was the
United States dollar, a situation related to the territory's
proximity to Puerto Rico and the United States Virgin Islands. Both
Anguilla and Montserrat used the British-sponsored Eastern
Caribbean dollar, although United States dollars circulated freely
on Anguilla. The Eastern Caribbean dollar was pegged to the United
States dollar at a rate of EC$2.70 to US$1.00 in 1987.